(Reuters) -Shares of dating app Bumble fell over 6% in premarket trading on Thursday, as investors reacted to a drop in subscribers and concerns about its ability to boost spending amid doubts over the pace of its AI innovation. Faced with falling user engagement driven by persistent inflation and stagnant innovation, Bumble and its larger rival Match have been revamping their apps to win back subscribers.
“While we’re not overly optimistic on the industry, sentiment in the space is already anemic,” analysts at RBC Capital Markets said.”..It may not yet be the darkest before the dawn,” they added.The dating app’s total paying users fell by 8.7% to 3.8 million in the second quarter.The results come after Match Group, parent to Tinder and Hinge, exceeded quarterly revenue expectations on Hinge’s strength and new leadership focus, although it logged a 5% decline in paying users, reflecting sector-wide pressure.In a bid to tackle persistent “dating fatigue”, Bumble has turned to AI-fueled innovation, which is expected to provide a much-needed boost for the dating app operator as it struggles with fading investor confidence in recent quarters.Shares of the Austin, Texas-based company have lost about 6.2% so far this year. The stock trades at 7.96 times its projected earnings for the next 12 months, compared with 14.64 times for Match Group.
(Reporting by Joel Jose in Bengaluru; Editing by Sonia Cheema)
